The Charity Commission has signed closer working agreements with two local authorities and a local fraud prevention partnership as part of a pilot to tackle misconduct and mismanagement, particularly around business rates avoidance.
The regulator yesterday published details of three memoranda of understanding agreements it has signed recently with the Kent Intelligence Network (a local partnership between Kent local authorities, the Kent Police and Crime Commissioner, and Kent and Medway Fire and Rescue Authority), Oxford City Council and with Broxbourne Borough Council.
Memoranda of understanding are intended to facilitate communication and promote co-operation between different bodies. The Commission already has a number with central government departments and other regulators.
A Commission spokesman said the memoranda with local bodies were part of pilot work which is “exploring ways of working more closely with local authorities to tackle misconduct and mismanagement by charities, particularly regarding business rates avoidance”.
In recent years a number of charities have been accused of helping landlords to avoid paying business rates by entering into short term rent agreements to occupy a building. Landlords have to pay full business rates on empty properties but if charities are occupying the building they can claim an 80 per cent discount, and local authorities have the discretion to increase this to 100 per cent.
Buildings occupied by charities have to be used for wholly charitable purposes to be eligible for the relief. If it is determined that charities are not occupying the property they can find themselves liable for the full business rates amount.
The Commission has been involved in investigating whether some of these charities involved in the schemes are operating within charity law. Earlier this year it published an inquiry report into the Africa Relief Trust, which had found itself in £800,000 debt after a scheme backfired.
Yesterday the Commission also signed a memorandum of understanding with the Information Commissioner. Last month it published a memorandum of understanding with the Big Lottery Fund.
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